The Internal Revenue Service (IRS) recently released a checklist to help public employers comply with the fringe benefit rules. Many of the provisions it addresses apply in the private sector as well.
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Fringe Benefits Compliance Self-Assessment for Public Employers (Form 14581-A) is one of seven such tools the IRS issued for voluntary use by government entities in assessing their compliance with various employment tax requirements. The forms have fillable check boxes and text fields so they can be completed electronically, or printed and completed manually.
These self-assessment tools should be completed by those responsible for withholding and paying employment taxes and filing required information returns, the IRS explained. Each topic contains brief information on the law with links to IRS publications and other authoritative resources that provide more information.
The IRS cited a number of “common errors” found in its audits of public employers, including failing to apply accountable plan rules to reimbursements and allowances, and to include taxable noncash benefits in employee wages.
The three-page checklist includes 11 items to mark “yes,” “no,” or “follow up.” The first one asks whether the entity follows “accountable plan” rules for reimbursing employees’ business expenses. The remaining items address specific types of fringe benefits and ask whether the entity includes their amount as taxable wages when applicable:
- Personal use of a government-owned vehicle;
- Other listed property or reimbursement of travel expenses to any workers;
- Group term life insurance provided by the employer;
- Meals provided by the employer;
- Lodging provided for workers;
- Educational assistance provided to workers;
- Achievement awards or length-of-service awards given to workers;
- Membership fees paid for any workers;
- Moving expenses paid for any workers; and
- Gift certificates given to any workers.
Each of these checklist items includes explanatory notes and references to more detailed IRS resources, where appropriate.